Number Thirty Eight: 14 May 2005

Rimbunan Hijau puts the squeeze on PatrickPruaitch

Logging giant Rimbunan Hijau is loosing patience with Forest Minister PatrickPruaitch and the pressure is showing in the Minister’s increasingly erratic anddesperate behaviour.

Rimbunan Hijau, frustrated at waiting formore than two years for Minister todeliver a raft of new logging permits, isfurious that its destructive loggingpractices have been internationallyexposed and that they are facing theloss of important timber markets inAustralia and New Zealand.

As the pressure mounts on the Minister,whose reputation is already severelytarnished, he is engaging in increasinglydesperate moves to satisfy his loggingmasters.

This culminated last week in a refusal by the Minister to follow the orders of hisNational Alliance party caucus to withhold the Forestry Amendment Bill fromParliament and his submission to the National Executive Council seeking theunilateral cancellation of the World Bank Forestry and Conservation Project.

While the Prime Minister is again travelling to Columbia University in the UnitedStates to promote his vision for a sustainable forestry and carbon tradinginitiative, his Forest Minister is threatening to make the PM an internationallaughing stock.

The Forest Minister Patrick Pruaitch has enjoyed the generous patronage of thegiant Malaysian company Rimbunan Hijau since he took office in September2002.

Feted by RH company executives and the spivs in its puppet lobby group, theForest Industries Association, the Minister and his wife have enjoyed expensive

trips abroad and generous ‘allowances’ above the usual rounds of free meals andcopious booze in Port Moresby’s restaurants and clubs.

In return the Minister had promised new timber permits and business as usual inthe remote logging camps where Rimbunan Hijau is notorious for its destructivelogging practices and human rights abuses. But, embarrassingly, the Minister hasbeen falling rather short in fulfilling his ‘big man’ promises.

His attempts to fast track new timber permits have been blocked by honestofficers in the National Forest Service and a group within the Forest Board whohave insisted on due process and landowners rights.

Meanwhile Rimbunan Hijau has been internationally exposed for its appallinglogging practices and human rights abuses.

While RH has been paying the Minister to smooth its image it has had to sufferrepeated humiliations that have culminated in comments from the head of theworld’s largest banking group, Citibank, that RH’s logging operations in PNG areunsustainable and illegal.

The International humiliation of RH

Over the past 12 months Rimbunan Hijau as been subjected to World scrutiny for

all the wrong reasons.

In February 2004 an international meeting of Prime Ministers and Presidents atthe Convention on Biodiversity in RH’s home country of Malaysia, was used byNGOs to launch a glossy report on Rimbunan Hijau’s world of forest crime andpolitical patronage.

‘The Untouchables’, which exposes many of RH’s illegal and unsustainablelogging practices, has been widely distributed all around the globe.

You can download ‘The Untouchables’ over the internet at:http://www.paradiseforest.org/publications.php

The publication of the ‘The Untouchables’ was followed in New Zealand by asurprise move from the traditionally conservative timber trade. In May 2004, theNZ Timber Importers Association announced that a Rimbunan Hijau subsidiarycompany was being kicked out of its association and that they did not want totouch RH timber from PNG.

RH tried to fight back through the Courts but in December a New Zealand judgedismissed claims from Patrick Pruaitch that all Rimbunan Hijau logging operationswere legal and unsustainable.

In November, Rimbunan Hijau had to suffer the further humiliation of the SBSDateline television expose titled ‘Jungle Justice’ that revealed how RH paysPNG police officers to protect its operations from disgruntled landowners and itsown workers and the terrible human rights abuses that the company sanctions.

The Australian Government then weighed in. Australian Federal EnvironmentMinister Ian MacDonald castigated RH on November 15th when he announcedthat Australia would introduce legislation to block the importation of illegal andunsustainable timber from operations like those of Rimbunan Hijau in PNG.

Again Patrick Pruaitch scrambled to defend RH with more of his hystericalnewspaper adverts, bungled press conferences and rambling media statements.

The Minister’s bumbling attempts to defend the indefensible were ridiculed athome. One letter writer in the Post Courier newspaper asked ‘Why is Pruaitchbacking the loggers?’ and ended with this plea ‘Mr Pruaitch, for how long areyou going to let these monsters destroy our forests. Be a Papua NewGuinean, because all of us live because of our forests".

And the Minister’s words failed to impress the international media who continuedto highlight the truth about Rimbunan Hijau’s logging operations.

Citibank pulls the plug on RH

Clearly Citigroup Chief Executive, Chuck Prince, didn’t believe a word that he

heard from the mouth of PNG’s Forest Minister.

In March this year the head of the world’s largest financial group that employsmore than 300,000 staff and has an annual turnover of several TRILLION USdollars, announced that his company did not want to do business with RimbunanHijau because of its appalling logging practices and human rights abuses in PNG.

When confronted with these facts in a blistering attack on the floor of Parliamentlast month, Patrick Pruaitch was almost speechless and mumbled someincoherent comments about ‘commercial decisions’ and ‘international markets’.

To listen to Pruaitch’s sell-out defence from inside Parliament, click here:

RH criticism at home

Meanwhile, back on home turf the Minister has been equally incompetent inprotecting his favourite Malaysian logging company from scrutiny.

Firstly, the Ombudsman Commission handed the Minister its report on theattempted illegal allocation of the giant Western Province Kamula Dosoconcession to Rimbunan Hijau. The Ombudsman made a number ofrecommendations including special scrutiny of RH and the removal of Pruaitch’saccomplice and RH stalwart Dr Wari Iamo from the National Forest Board.

This was not looking good – but Pruaitch managed to save some embarrassmentfor himself and RH by refusing to table the Ombudsman Commission Report inParliament and steadfastly ignoring its recommendations.

Pruaitch then had to preside over a Review of six new permits and extensionshanded out by his predecessor, Michael Ogio, in the dying days of the Moruatagovernment. Three of the permit extensions were for Rimbunan Hijau and allwere found to have been illegally issued.

The Review Team recommended a Commission of Inquiry into the relationshipbetween RH and certain senior public servants and their political masters.Pruaitch managed to side step that recommendation as well!

The Forest Minister has also refused to table for Parliamentary scrutiny a wholehost of other Government reports on Rimbunan Hijau’s illegal and unsustainablelogging. These reports include investigations into a number of individual RHlogging projects by the Review of Current Operations that reveal a catalogue ofabuses and unlawful activities.

While the Forest Minister continues with his denials, diplomats in Port Moresbyare not deceived.

This a recent assessment sent by one High Commissioner back to hisGovernment where he describes the Forest Minister as "childish":

"The forestry situation here gets worse by the day. An internal government

report declaring the Government's own policy to be peripheral and moribundhas been all but suppressed; and the Forestry Minister has refused to

comment in Parliament on it... Pruaitch has declined to be drawn ... in arather childish reaction to the questioning.

Malaysian logging companies, led by RH, continue to cut a swathe throughPNG's forests with impunity... Meanwhile the country's well drafted forestry

laws are chronically breached by the government itself.

In my travels I have been appalled at the huge destruction of the rainforest.Most of PNG's forests are now secondary. And the destruction of forest

communities in many areas has been nothing short of a disgrace. Humansrights abuses are relatively widespread, and because of the remoteness of the

forestry communities they either go undetected or un-investigated".

RH says "Where are our new logging permits?"

Rimbunan Hijau is increasingly angry over the Minister’s failure to deliver newlogging permits for the company. In September 2002, Rimbunan Hijau presentedthe new Minister with a list of the concessions they wanted – mostly in Gulf andWestern Provinces where PNG has its largest remaining tracts of commerciallyviable timber and where RH is already well established.

But Patrick Pruaitch has been woeful in his delivery. First, the Minister found thatany discussion of the prize that RH most coverts, Kamula Doso, was blocked byan Ombudsman investigation. Then the National Forest Board refused to reopenthe file and now the National Executive Council has declared the concession offlimits (after the Forest Minister presented a bizarre plan to declare the whole areaa Rural Development Zone and allow RH tax free status!).

Blocked from expansion in Western, Rimbunan Hijau then showed an interest inthe Amanab permits in Sandaun Province. While RH was reluctant to move to anew Province or to go to war with the competing logging company WTK, with theirtimber resources running out in their other concessions and continual problemswith their Wawoi Guavi and Vailala permits, West Sepik seemed a necessarystep. However WTK’s long established political links in West Sepik and a fewcompliant landowners, blocked any chances that RH might have had, andPruaitch was forced to give the new Amanab blocks to WTK.

In a last ditch attempt to satisfy the hunger of his Malaysian masters the Ministerwas able to sign off on the permit for the East Awin concession that surrounds theWest Papuan refugee camp. The Minister was told by the National Forest Boardthat the permit was illegal because it did not comply with the Forestry Act, but hesigned it anyway – because he knew that the chosen logging company, GLNiugini, was only a shelf company that had already agreed to sell on the permit toRH.

Once again things did not go the Ministers way. Because he did not stop to sortout various legal problems before he issued the permit, he had left himself wideopen to a legal challenge that is now dragging through the courts and preventingRH from starting its demolition of the forest.

RH, finding themselves blocked in Western Province and out-bid in West Sepik,

turned their malevolent attention to West New Britain.

The forests of WNB have been largely obliterated by 30 years of intensivelogging, but a few small pockets do remain and these have been tied together intwo ‘consolidated’ projects – Asengseng and Rottock Bay.

Rimbunan Hijau put in bids for both projects when they were advertised in 2003and started intensive lobbying. As landowner opposition against RH was verystrong in Rottock Bay they were only selected as the preferred developer forAsengseng,

Rimbunan Hijau were not happy, they wanted both projects as they are closetogether and the poor stocking density means that individually the twoconcessions are almost unviable, but the Minister was heaving a heavy sigh ofrelief at the prospect of at last delivering SOMETHING to his patron.

But then, last month, disaster struck in the form of a Court Order!

In the rush to get the permit issued, nobody had consulted the local politicians asrequired under the Forestry Act and MP David Sui has obtained an Order fromthe National Court preventing the Minister signing the timber permit.

The current situation

We have a forest Minister who has failed to protect his closet friends frominternational scorn and has failed to deliver them new permits (except the almostworthless East Awin concession in the remote north of Western Province).

Australia and New Zealand, the biggest markets for RH’s sawn timber, will soonbe totally off limits and to make matters worse, the domestic banks in PortMoresby (ANZ, BSP and Westpac) are now summoning RH bosses to explaintheir logging practices and human rights abuses.

Time is running out for Minister Pruaitch and he has adopted two desperatemeasures to try and extend his political control so that he can better serve RH’sinterests.

1. The Forestry Amendment Bill

When the Minister presented the draft forestry bill to the National ExecutiveCouncil for approval he did not disclose that he had interfered with the draftapproved by the Forest Board. He had added measures that wouldsubstantially increase his power over the Board and deny landownersrights.

NEC, unaware of the details, approved the Bill on April 13th. But Pruaitch’sown National Alliance Party caucus has not been so compliant. LastWednesday as concern mounted the party members issued an instructionthat Pruaitch arrange a private briefing for them by the Forest Authority.That Briefing took place on Thursday at the National Parliament, and as aresult of what the MPs heard; they voted that the Bill should not bepresented to Parliament during its current sitting.

The Minister was furious with his colleagues in the National Alliance, and heflew from the caucus meeting wildly declaring that he didn’t need NAapproval and that he would present the Bill anyway – something that hefailed to do as Parliament did not allow him the time

2. The World Bank

The Minister has also convinced the NEC that the World Bank is blockingnew forestry projects and he has got their consent to unilaterally cancel theForestry and Conservation Loan. Heaven forbid that that there is reform inthe forestry sector! Pruaitch might have to obey PNG's Laws!!!!!

This news was conveyed to World Bank officials when they met the ChiefSecretary in Cairns on the 2nd of May.

This will have serious implications for PNG.

It is usually not a good idea for a country to cancel a contract with the WorldBank as the Bank is then very reluctant to enter into any new deals for otherprojects – such as the much talked about Highlands Highway rehabilitation– and is quick to warn other international financiers that the country is a ‘badrisk’.

It also reflects very badly on PNG and affects its ability to attract financingfor major projects when the international financial community is aware that amajor loan has been cancelled because of corruption in government.

Minister Pruaitch is sending a very clear signal to the whole world. The PNGGovernment is dominated by corrupt influences and cannot be trusted.

The irony for Patrick Pruaitch is that as he becomes more and more desperate tofulfil his promises to Rimbunan Hijau’s he is exposing not only himself but thewhole Government to international ridicule and a reputation as being corrupt.

How long will Patrick Pruaitch’s own colleagues allow him to continue in office ashe increasingly tarnishes the image of them all? When will RH finally give up on

Pruaitch and demand a new Forest Minister? How long can he hold on as thingscrumble around him…….